20171115-中国银河国际证券-香港交易所-00388.HK-Most_Direct_Beneficiary_of_Market_Transformation__Upgrade_to_BUY_7页_731kb
报告摘要
Hong Kong Exchange [0388.HK] Summary
Core Content
The Hong Kong Exchange (HKEx) is being re-evaluated as a BUY recommendation due to a significant shift in the market structure. Previously, HKEx was viewed as a traditional high-beta cyclical play, but recent successful IPOs of new economy companies have changed this perception.
Main Points
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Market Transformation: The successful IPOs of Meitu (1357.HK), ZhongAn Insurance (6060.HK), China Literature (0772.HK), Razer (1337.HK), and Yixin (2858.HK) at high valuations have signaled a structural change in the market, leading to increased trading volume on HKEx.
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Trading Volume Growth: The ADT (Average Daily Turnover) of HKEx is expected to grow significantly. The analyst has raised the 2017E/2018E ADT assumptions from HK$78bn/85bn to HK$86bn/110bn, reflecting the positive impact of new economy IPOs.
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EPS and Target Price: The EPS for 2017E and 2018E has been revised upward by 7.4% and 11.7%, respectively. The target price has been increased from HK$246 to HK$287.6, based on a 40.9x 2018E PER.
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Current Valuation: HKEx is currently trading at a 33.5x 2018E PER, which is considered a mid-cycle valuation. The analyst believes that many investors have not yet fully recognized the potential for structural growth in ADT.
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Investment Highlights:
- Past: Most IPOs were from old economy sectors (banks, securities), which did not significantly improve ADT.
- Present: New economy IPOs have driven ADT growth, with several top IPOs in 2017YTD being new economy companies.
- Future: More new economy companies are expected to list on HKEx, further boosting ADT and overall market activity.
Key Financials
| Metric | 2015 | 2016 | 2017E | 2018E |
|---|---|---|---|---|
| Revenue (HK$ m) | 12,233 | 10,398 | 11,640 | 13,233 |
| Net Income (HK$ m) | 7,956 | 5,769 | 7,432 | 8,730 |
| Net Margin | 65% | 55% | 64% | 66% |
| Basic EPS (HKD) | 6.70 | 4.76 | 6.06 | 7.03 |
| YoY Change | 54.0% | -27.5% | 28.8% | 17.5% |
| PE (x) | 35.1 | 49.5 | 38.9 | 33.5 |
| PB (x) | 11.1 | 9.3 | 8.5 | 7.7 |
| ROAE | 31.1% | 18.6% | 21.7% | 22.7% |
| ROAA | 3.2% | 2.4% | 3.0% | 3.4% |
Key Assumptions
| Metric | 2015 | 2016 | 2017E | 2018E |
|---|---|---|---|---|
| ADT of equity products (HK$bn) | 79.9 | 50.2 | 70.2 | 93.0 |
| ADT of DWs, CBBCs & warrants (HK$bn) | 25.7 | 16.7 | 15.8 | 17.0 |
| Total Cash Segment ADT (HK$bn) | 105.6 | 66.9 | 86.0 | 110.0 |
| ADT of northbound (¥ bn) | 6.4 | 4.7 | 8.5 | 14.0 |
| ADT of southbound (HK$bn) | 3.4 | 4.1 | 9.5 | 15.0 |
| Southbound Contribution | 3.2% | 6.1% | 11.0% | 13.6% |
| Number of newly listed (main board) | 104 | 81 | 85 | 90 |
| Number of newly listed (GEM) | 34 | 45 | 80 | 42 |
Key Figures and Trends
- Figure 1: Most of the Top 10 IPOs in 2013-2016 were old economy companies, with limited impact on ADT.
- Figure 2: Top 10 Chinese ADRs (new economy) contributed HK$47bn to ADT, equivalent to 55.9% of HKEx's 2017 ADT YTD.
- Figure 3 & 4: ADT of HKEx increased from HK$66bn in 2016 to HK$84bn in 2017 YTD.
- Figure 5: HKEx is currently at a 33.5x 2018E PER, which is a mid-cycle valuation.
Analyst Information
- Analyst: Wong Chi Man
- Contact: (852) 3698-6317, cmwong@chinastock.com.hk
- Recommendation: Upgrade from HOLD to BUY
Disclaimer
This report is issued by Galaxy International Securities to institutional clients and is not directed at any person or entity in jurisdictions where it would be illegal to distribute or use. No warranty is given regarding the accuracy or completeness of the information. The report is not an offer to buy or sell securities. Past performance does not guarantee future results.
Equity Ratings Explanation
- BUY: Share price is expected to increase by more than 20% within 12 months.
- SELL: Share price is expected to decrease by more than 20% within 12 months.
- HOLD: No clear catalyst, and downgraded from BUY pending clearer signals.
Copyright
No part of this material may be reproduced or redistributed without the prior written consent of China Galaxy International Securities (Hong Kong) Co., Limited.
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